“Chinese Creative Writing” gained recognition as a subdiscipline under the discipline of Chinese Language and Literature in 2024, filling Chinese departments’ lacuna in literary creative writing resulting from overfocusing on academic research. In view of this development, this paper argues that the “Chinese Creative Writing” discipline should emphasise the “Chinese context” of “creative writing”. There is a need in the discipline to consider how to adapt to the styles, use of language, and cultural literacy of “Chinese-language writing” so as to enhance Chinese writing skills. Among these three aspects, the cultivation of cultural literacy, together with the assessment of such in creative writing, has yet to receive attention. Furthermore, the academic community should focus on innovating Chinese creative writing to enhance its influence and impact on the development of creative writing in the world by leveraging the field’s interdisciplinary nature. In line with this vision, the creative writing research team of Hong Kong Metropolitan University launched the research project “Teaching and Learning in Digital Humanities: A Study of Enhancing the Experiences of Chinese Literature and Culture through Interactive Installations for Immersive Space” in 2023. This project emphasises the cultivation of students’ cultural literacy and the interdisciplinary characteristics of the discipline, addressing the disconnect between traditional Chinese writing pedagogy and literary appreciation courses. In this project, the research team organised and designed iconic scenes from classical and modern Chinese literature and represented these scenes in a highly interactive MR/AR/VR environment. Moreover, utilising pre-trained Large Language Model (LLM) and Retrieval-Augmented Generation (RAG) technologies, the research team enables AI characters to interact with students through RAG and assist them in composing text that embodies the style of Neo-Sensualist literature by integrating digital humanities with art and technology, an evaluation based on existing studies of Neo-Sensualist, a rubric developed by the research team, and external data sources. Using the teaching of Neo-Sensualist novels as a case study, this paper demonstrates the impact of incorporating art and technology into the instruction of Chinese creative writing, particularly in the realms of literary appreciation and creative composition.